Given Data:
The initial amount is, P = 1000
The rate of interest is, r = 13% = 0.13
The compounding is done quarterly, so n = 4
The duration is, t = 2
Applying the formula to calculate compound interest, we have,
[tex]\begin{gathered} A=P(1+\frac{r}{n})^{nt} \\ A=1000(1+\frac{0.13}{4})^8=1291.577 \end{gathered}[/tex]Thus, they will be able to spend 1291.577 after two years.
